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Bank Card Default Rate Jumps in March
Thursday, April 23, 2015 6:30 AM

While overall consumer credit default rates remained flat in March, bank card default rates recorded the largest increase in five years, according to the S&P/Experian Consumer Credit Default Indices.

The bankcard default rate rose 15 basis points to 2.99 percent for the month after climbing by 23 basis points in February, the largest two-month jump since April 2010. The composite index, however, dropped to 1.05 percent in March, the first decline in defaults since July 2014.

"The increase in the bank card default rate over the last two months is the largest such jump in five years," said David M. Blitzer, managing director and chair of the Index Committee for the S&P Dow Jones Indices. "While bank card defaults spiked, default rates for first mortgages and autos were down in March and have shown no large increase since 2012."

Blitzer added that generous credit card limits might be behind the uptick in bank card defaults.

The auto loan default rate dropped 3 basis points to 1.03 percent, while the first mortgage default rate fell for a second straight month by 8 basis points to 0.92 percent. The second mortgage default rate fell by 16 basis points to 0.5 percent.

"Looking at the five cities tracked for the release, the only large move was an increase in Miami, which largely reversed the previous month's decline," Blitzer said. "Across the country, use of consumer and mortgage loans continued to expand."